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Derivatives and Hedging Activities | 9 Months Ended
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Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Hedging Activities | Derivatives and Hedging Activities The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses floating-to-fixed interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount The change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that approximately $2.3 million will be reclassified from other comprehensive income and reflected as a decrease to interest expense. The Company carries its interest-rate swaps at fair value. The Company has determined the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy with the exception of the impact of counter-party risk, which was determined using Level 3 inputs and is not significant. Derivative instruments are classified within Level 2 of the fair value hierarchy because their values are determined using third-party pricing models that contain inputs that are derived from observable market data. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measure of volatility, and correlations of such inputs. As of September 30, 2023, the fair value of the interest-rate swaps was approximately $6.6 million and is included in Other assets in the Consolidated Balance Sheets. The change in value during the period is reflected in Other Comprehensive Income in the Consolidated Statements of Comprehensive Income. The table below details the fair value and location of the interest rate swaps as of September 30, 2023 and December 31, 2022.
(In thousands) |  | Fair Values of Derivative Instruments
|  | September 30, 2023 |  | December 31, 2022
Derivative Instrument |  | Balance Sheet Location | Fair Value |  | Balance Sheet Location | Fair Value
Interest rate swaps |  | Other Assets | $ | 6,560 |  |  | Other Assets | $ | 3,962 |
The table below details the location in the financial statements of the gain or loss recognized on interest rate derivatives designated as cash flow hedges for the three and nine months ended September 30, 2023 and 2022.
(In thousands) |  | The Effect of Hedge Accounting on Other Comprehensive Income (OCI)
|  | Three Months Ended September 30, |  |  |  | Nine Months Ended September 30, |  |
|  | 2023 |  | 2022 |  |  |  | 2023 |  | 2022 |  |
Amount of gain (loss) recognized in OCI |  | $ | 2,804 |  |  | $ | 4,256 |  |  |  |  | $ | 4,106 |  |  | $ | 4,256 |  |  |
Location of gain (loss) reclassified from OCI into income |  | Interest expense, net and amortization of deferred debt costs |  | N/A |  |  |  | Interest expense, net and amortization of deferred debt costs |  | N/A |  |
Amount of (gain) loss reclassified from OCI into income |  | $ | (593) |  |  | $ | — |  |  |  |  | $ | (1,508) |  |  | $ | — |  |  |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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